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Pay-as-you-drive car insurance trend rolls forward in California
By Insure.com staff

A third insurer has the green light to offer pay-as-you-drive car insurance in California.

Insurance Commissioner Dave Jones approved Sequoia Insurance Co.'s filing to offer the program, which rewards policyholders with lower car insurance rates for clocking low mileage.

The Automobile Club of Southern California and State Farm Mutual Automobile Insurance won state approval in November to offer similar rate programs to customers. In California, regulations for pay-as-you-drive insurance took effect in 2009.

How pay-as-you-drive programs work

Under the voluntary discount programs, drivers report odometer readings or agree to have their mileage monitored by technology. Some car insurance companies, such as State Farm, partner with OnStar to monitor and report mileage. Other insurers supply customers with a wireless telematics device, which is plugged into the vehicle's onboard computer through a diagnostic port.

Mileage-based programs are taking off across the country. Other companies driving the nationwide trend include Progressive Insurance, GMAC and American Family Insurance.

Jones encouraged Californians to take advantage of the programs, "People who choose to drive less will pay less for auto insurance and at the same time reduce greenhouse gases," he said in a statement timed to coincide with Earth Day.

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